Tanzania’s electricity price, at $0.087 per kWh, positions it as a cost-effective choice within East Africa, balancing affordability and infrastructure development. Cheaper than Uganda, Rwanda, and Kenya, but higher than heavily subsidized Ethiopia and Sudan, Tanzania’s pricing supports industrial growth and investment while ensuring continued energy sector expansion. This competitive edge, coupled with ongoing improvements, strengthens Tanzania’s role as a regional hub for energy-intensive industries.
1. Tanzania's Electricity is Moderately Priced
At $0.087 per kWh, Tanzania's electricity prices are in the middle range:
Lower than Uganda, Rwanda, and Kenya, making it more affordable for households and industries in the region.
Higher than Ethiopia and Sudan, which benefit from government subsidies or lower production costs.
2. Regional Competitiveness
Tanzania is better positioned for industrial and economic activities compared to neighbors like Kenya ($0.255 per kWh) due to cheaper electricity.
However, it may face competition from countries like Ethiopia ($0.003) and Sudan ($0.006), where extremely low prices could attract energy-intensive industries.
3. Balance Between Cost and Infrastructure
The price reflects Tanzania's developing infrastructure and reliance on diverse energy sources like hydropower, natural gas, and renewables.
While prices are not the lowest, they ensure a balance that supports ongoing investments in energy infrastructure.
4. Opportunities for Investment
Competitive pricing makes Tanzania attractive for:
Energy-intensive industries like manufacturing and mining.
Regional exports of electricity to higher-cost neighbors like Kenya and Rwanda, if production capacity increases.
5. Challenges for Universal Access
Though prices are moderate, Tanzania must ensure:
Reliable supply, as outages and access disparities persist in rural areas.
Continued efforts to expand the grid and improve efficiency without overburdening consumers.
6. Tanzania in the African Context
Compared to DR Congo ($0.058) or South Africa ($0.182):
Tanzania offers better reliability than DR Congo, despite its higher price.
It remains cheaper than South Africa, giving it a competitive edge in attracting business.
Key Takeaways
Tanzania's moderate electricity prices strike a balance between affordability and development needs.
The country is regionally competitive, particularly compared to East African neighbors.
There is room for improvement in reliability, access, and cost-efficiency to boost economic growth further.
Electricity prices vary significantly across countries due to differences in energy sources, infrastructure, subsidies, and economic conditions.
Tanzania's Electricity Price (March 2024)
$0.087 per kWh
Positioned in the mid-range globally.
Higher than some neighboring East African countries but lower than the global and many African averages.
Comparison with East African Countries
Country
Price per kWh (USD)
Remarks
Ethiopia
0.003
Among the lowest globally, reflecting heavy government subsidies.
Sudan
0.006
Low due to subsidies and reliance on oil resources.
Zambia
0.020
Relatively low, supported by hydropower resources.
Uganda
0.172
Significantly higher than Tanzania, despite hydropower reliance.
Rwanda
0.187
Higher prices attributed to a smaller energy grid and reliance on imports.
Kenya
0.255
Highest in East Africa; reflects costs of geothermal and renewable energy.
Key Insights:
Tanzania's electricity is cheaper than Uganda, Rwanda, and Kenya.
Ethiopia and Sudan have the lowest prices, benefiting from subsidies and domestic production.
Comparison with Other African Countries
Country
Price per kWh (USD)
Remarks
DR Congo
0.058
Cheaper due to abundant hydropower resources but limited infrastructure.
South Africa
0.182
Higher than Tanzania, despite its extensive coal-based energy systems.
Ghana
0.108
Slightly higher; relies on thermal and hydropower sources.
Nigeria
0.013
Low due to subsidies and gas resources, but electricity reliability is poor.
